Charlottesville Bubble Bloggers’ Take on the Current State of the Market

It’s not often that I say something is a “must read”, but the Charlottesville Bubble Bloggers’ “Carpe Diem” Trumps “Caveat Emptor” As “Bottom” and “Recovery” Chatter Increase in the Charlottesville Real Estate Market Mid 2012 is such a post.

Broadly-sourced, logically articulated, they debunk a lot of the myths and stories underlying the Charlottesville real estate market – from shadow inventory to Charlottesville’s “protected” nature, to reduced inventories, home prices and more. I highly recommend reading it.

Their closing echoes much of what I have been saying here and in conversations with clients for months:

But for those who have been waiting to buy and waiting to sell, there’s more clarity than ever. The 30 year fixed rate mortgage is currently at 3.6% (Aug. 15). Buyers who have waited for years and are well-cushioned financially aren’t looking at a house as an investment but as a home. For those with stable jobs and a 7-10 year event horizon plus a capacity to absorb price wobbles, buying looks attractive. And there are many equity sellers getting off the fence, realizing that they’ll never get that dream of the missed bubble price: but acknowledging that moving on or moving up and getting things settled has a value greater than money.

If you’re going to buy a home in Charlottesville, understand that now is normal, or as an agent said to me several years ago: “It doesn’t matter whether the real estate market is ‘good’ or ‘bad’ – it is.

And so it is.

Update: Scott Roger’s post, In a market upswing, crying over missed past buying opportunities can lead to even more tears (archived: 2021), is great and succinct.

Buying a home is an emotional decision and process – fraught with intangibles and unquantifiables. Here’s one:

First time homebuyers (my clients) closed on a house this year. As we were discussing their moving process, cleaning their rental, packing, moving and the subsequent upheaval and trauma of a move, she looked at me and half (or less) jokingly said, “never having to go through this (moving) again is one of the reasons we bought!” And they’re not alone in that sentiment.

How does one value the stability that comes from owning a home?
(assuming life doesn’t throw a crazy curveball and force one to move sooner than expected or anticipated)

Further adding to the thought that we might or might not be in the middle of a recovery:

– For the sixth consecutive month, the rolling 12 month total for starts has been above completions – that usually only happens after housing has bottomed.

– “Shadow” & “Ghost” Inventory / Negative & “Effective” Negative Equity…The Real Challenges for US Housing — note: Charlottesville isn’t Phoenix. Or Orlando. Or Las Vegas. In this case, we are different and protected. Somewhat.

– The Economist’s Global House Price chart